Introduction

For almost a century the Japanese economy has grown at an exceptionally fast rate by international standards: in the interwar period the annual average rate was about 4.5 per cent, well over twice the rate in Western Europe.1 At that time the outside world paid little heed to this achievement, largely because Japan, having started from a low level of income and technical accomplishment, still lagged behind the leading countries. Even when certain Western industries, for example, the manufacture of textiles, pottery and some miscellaneous consumption goods, felt the impact of her competition in international markets, her success was commonly ascribed to her low wages. Her advances in productive efficiency were generally ignored. Up to the eve of the Second World War it seemed inconceivable that Japan could hope to match Europeans and Americans in the higher reaches of industrial enterprise. To quote Sir George Sansom’s comment on this attitude: there long remained in the minds of Westerners the presumption that ‘only they themselves had the secret of manipulating levers and valves’.2 An enquiry undertaken by the Royal Institute of International Affairs in 1935 came to conclusions that expressed the general view at the, time: Japan remains primarily a peasant and agrarian State’, so it was declared.3